The Association of Southeast Asian Nations (ASEAN) was

established as a regional organization in 1967 to accelerate

economic growth, promote regional peace and stability, and
enhance cooperation on economic, social, cultural, technical, and
educational matters among Southeast Asian countries. The five
founding countries Indonesia, Malaysia, the Philippines,
Singapore, and Thailandwere later joined by Brunei Darussalem
(Brunei) in 1984, Vietnam (1995), Laos (1997), Burma (1997), and
Cambodia (1999). Located in a region of the world with rapidly
expanding economies, ASEAN has a combined population of 550
million people largely characterized by rising incomes. As such, the
ASEAN nations are already an important market for U.S. companies,
and they represent significant opportunities for expanded trade and
investment.
regional trends in Southeast Asia in the areas of economic
integration, export competitiveness, and inbound investment for 6
of 12 priority sectors identified in the ASEAN Economic Community
Blueprint adopted in November 2007; the six sectors are agro-based
products, automotives, electronics, healthcare, textiles and apparel,
and wood-based products
The ASEAN Single Window could facilitate intra-ASEAN trade, but
progress remains slow. The ASEAN Single Window (ASW) is ASEANs
most visible effort to facilitate trade among members, by enabling
the rapid exchange of standardized data among countries customs
agencies. Currently, the ease of importing and exporting varies
widely among ASEAN members; procedural requirements are
relatively easy to complete in Singapore, Thailand, Malaysia, but
very difficult in Laos and Cambodia. Although the ASW has the
potential to bolster trade and foster intra-regional supply chains,
the development of the ASW has proceeded slowly since its creation
in 2005. While there are some indications that work on the ASW is
accelerating, faster progress and close consultation with ASEANs
business community on its design would ensure that the ASW
contributes robustly to ASEAN economic integration.
Economic Integration Economic integration generally refers to a
staged process through which a group of countries gradually
coordinate or merge their economic policies over time. This
coordination may be bilateral or carried out through a multilateral
organization such as ASEAN. The purpose of economic integration is
to lower trade barriers and other economic obstacles between
countries, thereby expanding markets and trade, lowering prices,
and improving the competitiveness of trade partners through lower
costs and economies of scale. For some economic integration
arrangements, the ultimate goal is a single market in which there is
a free flow of goods, services, capital and labor, and harmonization
of economic and monetary policies.2 In other cases, member

countries design the arrangement to be a free trade area, a customs

union, or a common market, with no intentions to integrate further.
The process of economic integration traditionally consists of four
stages, each building on the other (table 1.1): TABLE 1.1 Stages of
economic integration Arrangement Economic integration actions
Free trade area or agreement (including preferential trade
agreements) Tariffs among member economies are reduced or
eliminated, but the members maintain their own external tariffs
against the rest of the world. Customs union A common external
tariff is set among members, in which the same tariffs are applied to
third-country nonmembers. Common market Labor, capital, persons,
and services are allowed to move freely within and between
member countries. Economic and monetary union Monetary and
fiscal policies among members are harmonized, including the use of
a common currency. Requires the existence of supra-national
institutions to coordinate policies. Source: United Nations
University, Different Forms of Integration. For the ASEAN
Economic Community (AEC), the AEC Blueprint (Blueprint) defines
the goal of economic integration as the free movement of goods,
services, investment, and skilled labor, and freer flow of capital
among member countries by 2015.3 According to the Blueprint, AEC
economic integration will create (a) a single market and production
base, (b) a highly competitive economic region, (c) a region of
equitable economic development, and (d) a region fully integrated
into the global economy.4 The net economic benefits of economic
integration depend not only on trade created between member
countries, but also on the economic costs associated with trade
diverted away from lower-cost nonmember countries.5 To the extent
that economic integration arrangements are made between
participating countries that are natural trading partners, it is
considered probable that economic integration will benefit those
countries.
ASEAN was established in 1967 to accelerate economic growth,
promote regional peace and stability, and enhance cooperation on
economic, social, cultural, technical, and educational matters.1 The
five founding countriesIndonesia, Malaysia, the Philippines,
Singapore, and Thailandwere later joined by Brunei Darussalam
(Brunei) in 1984, Vietnam (1995), Burma (1997), Laos (1997), and
Cambodia (1999).2 Since its founding, ASEANs progress on
economic integration has been affected by various factors. As a
largely voluntary, consensus-based institution, 3 with an
economically and politically diverse membership, ASEAN has
generally followed a slow, step-by-step approach to building
regional cooperation and has progressively entered into more
legally binding and institutionalized agreements.4 However, certain
external events have stimulated faster and deeper progress on

integration among member countries: a growing international trend

toward regionalism and free trade agreements (FTAs), especially
those involving ASEANs important trading partners; the Asian
financial crisis of 1997; the rise of emerging economies that
compete with ASEAN countries, especially China and India; and the
200809 global economic slowdown.5 Although political security was
ASEANs initial focus, economic cooperation grew in the 1970s with
agreements on joint industrial projects and preferential trading
arrangements (box 2.1).6 The first substantial step toward
integrating the ASEAN market came in 1992 when the ASEAN-6
agreed to establish the ASEAN Free Trade Area (AFTA).7 The AFTA
provided for the reduction or elimination of tariffs under a Common
Effective Preferential Tariff scheme (CEPT) and the removal of
quantitative restrictions and other nontariff measures (NTMs). It
also addressed other cross-border measures, such as trade
facilitation and standards harmonization.8 ASEAN leaders signed
agreements to liberalize services trade in 1995 (ASEAN Framework
Agreement on Services, or AFAS) and investment flows in 1998
(Framework Agreement on the ASEAN Investment Area, or AIA).
ASEANs openness to international trade and investment has
contributed to vibrant export sectors and the development of
regional manufacturing production networks.42 Because ASEAN
markets are relatively small, a major goal of the creation of the AEC
is to reduce transaction costs and attract investment so as to better
exploit opportunities to participate in global supply networks and
serve as a regional production center.43
ASEAN Single Window ASEAN members senior economic officials
have deemed the ASW the single most important initiative of
customs that will ensure expeditious clearance of goods and reduce
the cost of doing business in ASEAN.87 ASEAN members signed the
Agreement to Establish and Implement the ASEAN Single Window
(ASW Agreement) in December 2005. The agreement defines the
ASW as the environment where National Single Windows (NSWs) of
Member Countries operate and integrate, and says that National
Single Windows enable: a. a single submission of data and
information; b. a single and synchronous processing of data and
information; and c. a single decision-making point for customs
release and clearance.88
ASEAN 2015: BENEFITS AND IMPLICATIONS TO
PHILIPPINE BUSINESSES
Research > Presentations > ASEAN 2015: Benefits and Implications
to Philippine Businesses
There is simultaneous happiness and unease over the ASEAN Free
Trade Agreement (AFTA) or its more recent transformation into
ASEAN Trade in Goods Agreement (ATIGA) and ASEAN Framework
Agreement on Services (AFAS). These are the heart of the ASEAN

Economic Community for which a mindset change of stakeholders is

needed to face the end- 2015 economic integration deadline; these
include politicians who have to implement agreements committed
and signed by the government, business leaders who ask for
protection and preferential treatment instead of proactively
addressing long-term problems, and the general public who must
wage a continuous battle against corruption and inefficiency.
Fears over changing comparative advantages, bad environments of
doing business, more complex and chaotic global conditions, etc.
must be balanced by careful exploitation of opportunities. The
Philippines has its own strengths going into AEC 2015 ,e.g.,
governance improvements that led to stronger economic
fundamentals and investment upgrades, and network of overseas
Filipinos who bring information on markets, financing options,
transferable technologies on top of continued foreign exchange
remittances.
It could overcome its weaknesses by pushing for more reforms in
investment/ trade promotion and facilitation by
Automating business procedures in national government agencies;
streamlining procedures across various offices, and making them
more transparent and consistent;
Unifying various investment promotion bodies and adopting PEZA
operation practices, harmonizing their incentives, reviewing the
Constitutional 60-40 rule on foreign equity participation and other
limitations; and
Instituting a national single window and linking its databases with
the Bureau of Customs to improve risk management ; instituting egovernment with sufficient physical and human infrastructure.
The Philippines should also pay attention to its much neglected
physical ports facilities through PPP, remove conflict-of-interest in
regulatory agencies that own certain infrastructure, review its
cabotage policy, and improve the efficiency of regulatory agencies
and trade-related offices.
The ASEAN Political-Security Community and the ASEAN SocioCultural Community do not receive as much attention but serve as
foundations for the economic pillar of the integration exercise in
Southeast Asia. Issues such as drug trafficking, labor migration, a
peacekeeping force, strong mechanism for enforcing human rights,
and border issues among member states and with China on
maritime waters do affect the progress of the ASEAN Economic
Community. Local and foreign direct investments, as well as
government expenditures, are swayed in certain locations and
industries according to perceptions on these matters.
Prof. Federico M. Macaranas, Ph.D
6th General Membership Meeting
Philippine Association of National Advertisers (PANA)

Makati Shangri-La Hotel, Makati City, Philippines

June 24, 2014
Four broad characteristics define ASEAN. First, it is a region of great
diversity, probably more so than any other group in the world.
Indeed, its economic, political, cultural, and linguistic diversity is
greater than that of the European Union, for example. This diversity
was accentuated by colonial experiences, with Brunei Darussalam,
Malaysia, Myanmar, and Singapore part of the British empire;
Cambodia, the Lao Peoples Democratic Republic (Lao PDR), and
Viet Nam annexed by the French; Indonesia ruled by the Dutch; the
Philippines under first Spanish then American rule; while Thailand
was never formally colonized.2 Political structures are equally
diverse, including freewheeling democracies (Cambodia, Indonesia,
Philippines), communist states (Lao PDR and Viet Nam), a
constitutional democracy with a highly influential monarchy
(Thailand), heavily managed democracies with one party in
continuous rule since independence (Malaysia and Singapore), a
military-dominated authoritarian state (Myanmar), and an allpowerful sultanate (Brunei Darussalam). ASEAN includes one very
wealthy nation (Singapore) alongside some of the worlds poorest.
The per capita income of the richest is about 80 times that of the
(imperfectly measured) poorest. It includes the worlds two largest
archipelagic states (Indonesia and the Philippines) together with
Singapores city-state, and the tiny oil sultanate of Brunei
Darussalam. It includes the worlds fourth most populous nation
(Indonesia), three states with populations between 60 and 90
million people (Philippines, Thailand, and Viet Nam), while
Singapore and Lao PDR have less than five million people; Brunei
Darussalam less than half a million. 1 Indonesia, Malaysia,
Philippines, Singapore, and Thailand. 2 A word on country names is
relevant here: Myanmar is also referred to as Burma, especially by
those who do not recognize the legitimacy of the current regime,
while Laos is officially known as the Lao PDR (Peoples Democratic
Republic), and Brunei is short for Brunei Darussalam. 2 | Working
Paper Series on Regional Economic Integration No. 69 Second, most
of the countries have achieved rapid economic development for
most of the past 25 years, and longer in some cases. Four of them
Indonesia, Malaysia, Singapore, and Thailand were classified by
the World Bank (1993) as miracle economies. Since the late
1980s, Cambodia, Lao PDR, and Viet Nam have successfully
engineered a transition from planned to market economies with
significantly increased growth rates and sharp reductions in
poverty. The regions economic dynamism and steadily expanding
cooperation created a virtuous circle, with increased ASEANs
regional harmony providing an enabling and more conducive
business environment. Nevertheless, ASEAN membership has been

no guarantee of economic success. Myanmar and the Philippines, for

example, were touted in early development economics literature as
being prime for rapid economic development, yet they have
underperformed, the former disastrously so. Third, ASEAN
diplomacy and cooperation have been characterized by caution,
pragmatism, and consensus-based decision-making. The so-called
ASEAN Way is enshrined in noninterference in others internal
affairs and can be characterized by lowest-common-denominator
decision-making. ASEAN leaders have deliberately avoided creating
a strong supranational regional institution, and the ASEAN
Secretariat has been deliberately underpowered, serving more as a
diplomatic facilitator and conference organizer rather than a strong
EU-type agency. These characteristics are both strengths and
weaknesses: they explain ASEANs durability, but also limit
effectiveness and capacity for strong and decisive action. Fourth
related to the third observationASEAN has never been, and
probably will never be, an EU type organization, nor even a NAFTAtype economic bloc. That is, in the foreseeable future it is unlikely
to adopt a common external trade regime, with completely free
commerce among member states.. In fact, although it appears in a
formal sense to be a quasi-preferential trading bloc, in practice,
most of trade liberalization have been multilateralized as part of
unilateral domestic reforms individually. Moreover, ASEAN is even
less likely to develop formal mechanisms for macroeconomic policy
coordination, leading for example to a common currency or central
bank. ASEANs key challenge has from birth been to define a role for
itself, especially since Asias two giants, the Peoples Republic of
China (PRC) and India, are now growing faster than ASEAN in
aggregate. Will it, as some pundits suggest, be forever at the
crossroads, institutionally unable to establish a stronger variant of
economic cooperation, and therefore confined to a loose
association, a forum for leaders only to discuss issues of regional
interest?
Free trade is a significant stimulus to regional production, linkages
and competitiveness. ASEAN has made significant progress in that
regard since the implementation of the ASEAN Free Trade Area
(AFTA) from 1993. The AFTA initiative has been particularly
successful in reducing tariffs in the trade in goods.
Currently, some 99.8 per cent of the products in the Inclusion Lists
of ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, the
Philippines, Singapore and Thailand) have been brought down to the
tariff range of 0-5 per cent, with about 65 per cent of those products
having zero import tariffs. Meanwhile, 91 per cent of the products
traded by the CLMV countries (Cambodia, Lao People's Democratic
Republic, Myanmar and Viet Nam) under the Common Effective
Preferential Tariff package have been moved into their respective

Inclusion Lists. About 77 percent of those products are already

within the 0-5 per cent tariff band.
However, regional free trade alone is not sufficient to release the
full energies and the inherent potential of ASEAN. All of us now
have to take a further step forward. Deeper economic integration is
necessary for ASEAN to cope effectively with the unprecedented
opportunities as well as the unprecedented challenges, on both
scale and depth, unleashed by globalisation.
China and India have altered the global economic landscape through
huge market openings and greater competition, too. Meanwhile,
interlinked supply networks have proliferated all over the world,
among many other innovative and more efficient ways in value
creation and industrial organization. Last but not least, there are
the freer and often instant movements of new ideas, people and
resources across national boundaries.
The ASEAN Economic Community. In the midst of two giant
economies, ASEAN Leaders made a historic resolution in December
1997 to leverage the region's potential by building an economic
community (ASEAN Vision 2020). Henceforth, ASEAN is to be
transformed into a stable, prosperous, and highly competitive
region with equitable economic development, and reduced poverty
and socio-economic disparities.
Notably, that resolution took place in the midst of a severe financial
and economic crisis in ASEAN. This underscored once again ASEAN's
common perception of the critical importance of greater regional
cohesion and complementation in coping with good as well as bad
times.
Subsequently at the Bali Summit in November 2003, ASEAN Leaders
declared that the AEC would be the end-goal of regional economic
integration (Bali Concord II). This Community shall weld together 10
separate entities as a single market and production base by 2020.
The ASEAN Economic Ministers have recently recommended that the
target year be sped up to 2015.
Put it simply, there will be a free flow of goods, services, investment
and a freer flow of capital in the AEC. This is to be complemented by
freer movements of skilled human resources -- including regional
business persons, professionals, and cultural and artistic talents.
The consequent gains from deeper and broader integration are
substantial in ASEAN. They are estimated by McKinsey and Co to cut
as much as one-fifth of production costs of consumer goods in the
region.
As such, the AEC building process will empower ASEAN to remain a
dynamic and competitive player in the regional and global supply
chains. But the same process is also predicated on wide-ranging
adjustments and reforms to be carried out by Governments and the
business sector, among other stakeholders in the region.

The commitments so far made include, to name just a few, the

ASEAN Free Trade Area of 1992; the ASEAN Framework Agreement
on Services of 1995; the ASEAN Agreement on Customs and the
ASEAN Customs Vision 2020 of 1997; the Framework Agreement on
the ASEAN Investment Area and the ASEAN Framework Agreement
on Mutual Recognition Agreements, both of 1998; the Initiative for
ASEAN Integration of 2000; the ASEAN Framework Agreement for
the Integration of Priority Sectors of 2004; and the ASEAN Policy on
Standards and Conformance of 2005.
ASEAN has three key strengths in the economic arena. We have
abundant natural resources in our region. We have large supplies of
professionals and talented people. And, we have the capability to
adopt, adapt and advance technology. By leveraging on these
strengths the AEC is likely to be realised sooner than later.
ASEAN Charter. A key development complementing the AEC work is
the process to establish the ASEAN Charter. A Charter is certainly
not a panacea. But at a minimum, it is going to facilitate the
transformation of ASEAN into a rules-based regional organization
with a legal personality. Provisions in the Charter to establish
robust mechanisms for monitoring implementation and ensuring
compliance would contribute greatly to ASEAN's effectiveness.
Through the Charter, ASEAN will be able to enshrine the values and
principles that shaped by our history and experiences in the last 39
years. It will virtually become our new and official birth certificate in
the sense that we are re-born as the ASEAN Community. Such a
Charter would also serve to make ASEAN a more responsive,
dynamic and integrated regional organisation. In short, the Charter
will define ASEAN's future.
The ASEAN Eminent Persons Group (EPG) has been working on its
recommendation for the drafting of the Charter. In a few days, the
EPG's report will be considered by the ASEAN Leaders during the
12th ASEAN Summit in Cebu, the Philippines, from 11-12 December
2006. In that report, the EPG will recommend what should go into an
ASEAN Charter. And at the upcoming Summit, a High-Level Task
Force is expected to be mandated by the ASEAN Leaders to start
drafting an ASEAN Charter, taking into account recommendations of
the EPG, among other things.
This achievement would not only become a benchmark for the
region to further enhance its cohesiveness and coherence, but also
would venture forth a new cooperative spirit for the community
building in the region. To be sure, there is a lot more work to do,
especially in converging the different levels of ambition. Yet, I am
optimistic ASEAN is on the threshold of a quantum leap in collective
development and growth.
ASEAN-EU economic interaction. Against that backdrop of dynamic
changes and developments within ASEAN, the EU has remained,

among other roles, an important partner in trade and investment

and a major source of technical assistance to ASEAN. The EU's
valued roles will continue to be very helpful to AEC building efforts
in the coming decade.
As a market, for example, the EU-15 economies took in some US$ 78
billion worth of ASEAN exports in 2005, a steady growth of 5 per
cent a year since 2000. The EU was the third largest trading partner,
with an average share of 12 per cent of ASEAN trade in the last two
years (or just about one percentage point behind Japan and the
U.S.A. during 2004-2005). Germany, Netherlands, the United
Kingdom, and France are the most important EU traders with
ASEAN.
Likewise, the EU-15's foreign direct investment (FDI) in ASEAN has
been significant, with the largest share of 57 per cent of the FDI
hosted by our region in 2000 (totalling US$ 23.5 billion). However,
this share fell to 19 per cent of the FDI flows to ASEAN (US$ 38.1
billion) in 2005. Singapore, Indonesia, Malaysia, Viet Nam and
Thailand were the main destinations of FDI from the EU.
FDI from the United Kingdom provides a contrast, however. It
accounted for 20 per cent (or US$ 2.7 billion) of FDI from the EU-15
in ASEAN in 2000, and 62 per cent (or US$ 4.4 billion) in 2005.
Singapore and, to a much lesser extent, Indonesia, Malaysia and
Brunei Darussalam were the main hosts of FDI from the United
Kingdom.
The sharp upswing in FDI flows into ASEAN, by 62 per cent between
2000 and 2005, is noteworthy. This is an eloquent expression of
external market confidence in the prospects for sustained
development and stability in our own part of the world.
But there is still much scope for a significant expansion of
commercial synergies between ASEAN and the EU, according to the
Report of the Vision Group on ASEAN-EU Economic Partnership.
Furthermore, such an enlarged relationship will serve a catalyst to
the harmonious and broad-based development of the two regions
and, more generally, to the growth of world trade and investment in
the 21st century. And an ASEAN-EU FTA has been mooted in this
context.
In the meantime, however, the deepening integration within ASEAN
itself will create numerous additional opportunities for gainful
interactions in trade and investment, not just among the regional
economies but also among all their external partners as well.
What then is the remaining agenda? On the one hand, it would be a
mistake to underestimate the concerted efforts and sacrifices that
have been made thus far by all ASEAN stakeholders in sustaining
economic cooperation and in AEC building. This applies especially to
those in the less developed economies of our region.

Nevertheless, the effective coordination and timely implementation

of commitments remain a challenge for attention and management
by most Governments and other stakeholders in ASEAN. There is
also much room for more systematic and extensive dissemination of
information to the public, both at home and abroad, regarding
integration initiatives and their (actual or expected) progress and
outcomes.
Regular consultations have been held with, and inputs received
from, the ASEAN Business Advisory Council and the ASEAN Chamber
of Commerce and Industry. However, a perception lingers that the
private sector has not been fully and actively involved in the
integration and community building processes in ASEAN. There are
no easy answers as regards the workable alternatives and options.
On the other hand, it would also be a mistake to under-estimate the
remaining tasks to be implemented and the new commitments to be
made ahead. ASEAN is not a Customs Union with a common external
trade policy, including the same external tariff wall. It is not the
single market that the EU has evolved into. We have a large
geography and vast seas separating thousands of islands.
Communications and infra-structural deficiencies are daily headache
for our people.
There are still major barriers to the free movement of resources and
inputs in the region at present. Such barriers include large
differences in tax rates on (intra- and trans-regional) businesses
and investments. On this fiscal matter, ASEAN has yet to embark, for
example, on the harmonization and standardization of laws and
regulations on business and on competition.
Deeper integration in banking, finance and capital markets is ongoing; this can also be an equally challenging process in ASEAN.
Meanwhile, significant volatility in Member Countries' rates of
exchange and large differences in the rates of interest and inflation
would certainly not be conducive to the most optimal allocation of
scarce resources. At the same time, however, there is no plan for
ASEAN common currency in the next 10-15 years.
There is then an over-arching issue: the development gap in ASEAN.
This gap, which is unlikely to be bridged by 2020, can be another
barrier to regional integration. More substantive programmes
complementary to or in supplement to the Initiative for ASEAN
Integration may be needed. The introduction of a region-wide levy
(say, on tourists in or from ASEAN) for funding those programs is an
often-cited option for consideration.
A final note. Deeper economic integration is an imperative although
the symphony of integration is unfinished in ASEAN. All
stakeholders must resolve, firmly and soon, to take the next steps
toward the AEC.

To do less would surely mean a future less rewarding, less

prosperous, less secure and less equitable for all the peoples of
ASEAN. That is the challenge facing all of us but the challenge can
be managed.
ASEAN's resilience has not been derailed by the recent oil price
shock and higher interest rates. Economic growth is expected at a
respectable rate of about 5.5 per cent in the next few years,
according to the Asian Development Bank. All these augur well for
the region's own transformation into a vibrant AEC a decade from
now
But such dynamism also underpins a meaningful and differentiated
role of ASEAN economies in the Pan-Asian region where the world's
manufacturer of choice (China) and the world's back office (India)
are situated. In particular, ASEAN-China trade has grown
substantially and very fast in the recent years. ASEAN now has a
free trade agreement on goods with China and with the Republic of
Korea., while FTAs with Australia and New Zealand, India and Japan
are under negotiation.
Thus, ASEAN is not standing alone in our historic efforts at AEC
formation. The future looks bright with sustained regional and
international collaboration, including from the EU and other
partners of ours, in response to the constant emergence of
opportunities for inclusive and stable development.
MANILA, Philippines - We are not ready.
This was the blunt assessment of business leader Manny V.
Pangilinan on the Philippines readiness for the ASEAN economic
integration in 2015, warning that the Philippine government must
now act to prepare local industries, specially the agriculture sector,
to compete in the new economic regime.
The PLDT chairman admitted he is worried that the Philippines has
not grasped the wide-ranging impact ASEAN Economic Integration
will have on jobs and income.
The Philippines has committed to integration by 2015, which aims to
create single market and production base and to develop ASEAN as
a highly competitive economic region.
An ASEAN Economic Community (AEC) briefing paper identified the
following areas of cooperation: human resources development and
capacity building; recognition of professional qualifications; closer
consultation on macroeconomic and financial policies; trade
financing measures; enhanced infrastructure and communications
connectivity; development of electronic transactions through eASEAN; integrating industries across the region to promote regional

sourcing; and enhancing private sector involvement for the building

of the AEC.
In short, the AEC will transform ASEAN into a region with free
movement of goods, services, investment, skilled labor, and freer
flow of capital, the AEC briefing paper added.
While the objectives are laudable, Pangilinan said the country
should be aware of the impact on jobs, income and food security.
Frankly we are not ready for this ASEAN Economic Integration,
Pangilinan said in an interview with TV5.
Using the Philippines sugar industry as an example, Pangilinan
pointed out local producers will not be able to survive the onslaught
of cheaper priced imports. If tariffs go down by the end of 2015 as
mandated by the ASEAN Free Trade Agreement then we have the
ability to import sugar that is much cheaper from Thailand,
Pangilinan said, warning so paano yun? It will kill the sugar
industy.
Nonetheless, he said the government can still act: Will we allow
the sugar industry to get slowly killed by that kind of regime? and
added, By making our sugar industry more efficient, we can be
competitive. Otherwise, well just be out of business.
Impact on labor, incomes
The bigger concern is the impact on jobs and individual income.
The practical realities are really very serious. I mean, you could be
putting people out of work, right, he said, thats where the rubber
hits the road, isnt it?
He is skeptical as well on the claim that ASEAN Economic Integration
will promote mobility of labor, specially skilled labor and health
workers, among member countries. He believes each country would
come out with regulations to protect their own workers.
Using Philippine doctors and nurses as an example, Pangilinan
expressed concern that other ASEAN countries would come up with
policies favoring their own nationals first for skilled jobs.
Will there be, as a matter of regulation, a requirement to be
accredited in the ASEAN countries? There lies the possibility of lack
of mobility, he said, adding that because one particular country, I
would imagine . . . will try to protect its own doctors and nurses.